AFTER FIVE YEARS and more than 25,000 units sold, The Covenant Car Company, Inc. (TCCCI), erstwhile country distributor of the Morris Garages (MG) brand, is looking to turn the page on its relationship with SAIC Motor, which owns MG.
“It’s a global decision that (SAIC) has decided (on). Wherever they are, they will be the distributor,” said TCCCI President Atty. Albert Arcilla over lunch with a handful of motoring media, including this writer.
Atty. Arcilla, along with TCCCI Executive Vice-President and Director for Marketing Communications Lyn Buena, sought to clarify some reports that they felt mischaracterized or failed to accurately capture what was to happen regarding MG in the Philippines.
First, TCCCI is not being eased out of the picture through an abrupt (or even hostile) takeover by SAIC Motor Philippines (SMP). The contract for TCCCI’s MG distributorship was inked in 2018 and is set to expire this month. And while it’s true that SAIC Motor Philippines has been created with the specific intent to take over the importation and distribution duties, what the role of TCCCI in MG Philippines will be once a new contract is inked remains to be seen.
“Even before we started, they’ve always been here,” maintained Atty. Arcilla, referring to SAIC/MG officials from China. “It’s nothing new. The only difference is that they want to set up their own company here and become the distributor. We respect that. Our contract has always been valid for five years.”
When asked if a renegotiation was ever in the cards for possible extension of the distributorship, the executive replied: “We saw it on the regional level that they were already representing themselves. I don’t think we can make a different setup. Of course, we’re thinking that ours is still a growing market. But it’s a global direction… the business model is to (take charge) where they are.” So while there is a provision in the contract that allows for both parties to renegotiate for another term, it of course needs to be mutually agreed upon — and SAIC’s regional direction is already clear.
What is being hammered down for the moment are the brass tacks of how TCCCI’s role will exactly look like by August.
“We have been talking to them for other services,” shared Atty. Arcilla. “I think they’re happy with MG’s performance in the Philippines. The relationship with TCCCI is there, and they’re talking to us about what we can do for them. We’ve done very well for the brand, if I may say so.”
Added Ms. Buena: “In fact, we were distributor of the year on our first year as importer — the only one with that distinction among 80 countries.”
Atty. Arcilla observed that SAIC’s actuations reflect a fundamental change in business models. “We need to live with it,” he submitted. “Before, there were a lot of distributors, but we’ve seen them set up their companies where they are. To be honest, I generally see this happening with China-headquartered brands, which would then look for local partners or service groups.”
While TCCCI waits for how the relationship will be defined, the company has plenty to be busy with. It has administered over the Chevrolet brand in the country since 2009. It was actually good timing when MG was offered to the company in 2018, shared the executives, as Chevrolet was then pulling out models. “We were given a five-year horizon by Chevy,” said Atty. Arcilla. “Sure enough, new models are now coming in.”
Taking in additional auto marques is also something always being considered by TCCCI. “We are very open to represent other brands,” he declared.
At the end of the day though, TCCCI wants to take care of the customers it has won over since taking the reins of MG. “We feel responsible for the buyers who bought into MG based on our representation. We’ve been selling the cars for five years, and a lot of people have bought MG vehicles based on our representation. We need to protect that. We cannot lose the trust of our clients. I think even SAIC and MG know that,” asserted Atty. Arcilla.
However shape or form the new deal will take, TCCCI also said it remains committed to doing a seamless turnover — and that includes endorsing the dealer-principals directly to SAIC. “When we were informed of regional plans, we immediately put the dealers on board,” he continued. “We’ve communicated to our dealers. It’s an opportunity. Most of them have understood the change and how to work around it. They are in talks with SMP with their own dealership agreements. We’ve opened the communication lines with SAIC and the dealers. The dealers need to know where they will get inventory.”
As for TCCCI, it will continue to sell the cars in its own inventory, and the discussion with SMP remains “very open, fluid, and transparent.” Atty. Albert happily noted: “I think they intend to grow the brand. We have been very cooperative.”
Of course, letting go of the MG steering wheel signals the end of an era. “It’s bittersweet, yes, but again it’s a global decision. We’ve seen it so many times,” said the executive.
“There’s no label yet,” he continued with laugh. “But the relationship has been beneficial for both sides for five years… As long as we can come up with a workable relationship, why not? We’ll see where the new business model brings us.”
